The Added Value of Procurement Services
The topic of this post demands a certain question: what added value does your business or organization stand to gain by utilizing the procurement services of a “middleman” to get the things you need?
In the case of technology consulting firms, the question is: what added value exists in enlisting our procurement services to obtain Information Technology solutions? In this post, I will share some honest observations and speculations about this value and how it can benefit your company or organization.
In my three months as a member of Kraft & Kennedy’s Purchasing Practice Group, I’ve been learning the legwork of our purchasing process. I can tell you from firsthand experience that some of the work involved in the purchasing process can be quite cumbersome. You must be sure the technology you’re purchasing meets very specific business and technical requirements. You must track everything you buy, stay current with warranties for your hardware to ensure your equipment is protected, and – should something malfunction or break – you will inevitably spend a good chunk of valuable time on the phone with various customer service representatives. For software, renewals must be generated and processed, licensing must be tracked and current, and customer support for some products can consume a good deal of time.
Herein lies the first layer of the added value behind utilizing Kraft & Kennedy’s – or any other technology reseller’s – procurement services: our clients can remove or reduce the amount of time and resources they need to allocate towards dealing with the tedious details tied to the purchasing process. Keep in mind, when I use the phrase “purchasing process” I am not simply referring to buying software or hardware. I’m talking about buying these things and staying current with them all the way through to the “end of life” of the purchase. For hardware, that would be the end-of-life of a machine. For software, this would mean making sure your organization never lets a software renewal slip through the cracks. The result of this would be a temporary loss of one of your vital tools or a complete hardware failure, and the necessity to scramble in order to remedy the problem– which, in worst case scenarios, can be very costly. In short, you lose the time – and value it carries – that you wouldn’t otherwise lose if you enlisted the procurement services of a technology reseller.
One other quick note when it comes to software. It is often the case that a reseller has employees with the expertise and skillset to offer support for various software products that it resells. This affords the client the chance to save even more time by receiving faster, more accountable, and more personalized support. This, as opposed to calling up a helpdesk at a big corporation and waiting in a queue for 25 minutes before your call is even answered… you get the picture. Note to the reader: always be sure to ask what, if any, software a reseller can support. Some software support is only contracted directly with the manufacturer, so you should never assume that a reseller will offer support for software it resells.
Alleviating the resources needed to keep up with the purchasing process is beneficial to the client, to be sure, but it is just a small fraction behind what added value exists in buying through a reseller. In conversations I’ve had about this topic, I’ve noticed a common belief many people share: organizations save money by cutting out the middleman and buying direct. I can’t give away all the tricks of the trade, but I can tell you that this belief has little credibility in the arena of buying technology.
To start, the general goal of our purchasing process is to consistently sell at a cheaper price than our competitors. This competition ultimately benefits the consumer, as every reseller is trying to do what they can to offer the best deal. So, how do we at Kraft & Kennedy and other technology consulting and reselling companies get these magic numbers we’re willing to do business around? The answer is simple: purchasing power. Individual offices or organizations make bulk IT purchase how often? A few times per year? Once every five or six months, if that at all? Being a customer who makes any given number of these purchases per week, we establish a steady flow of business. The benefits reaped from this flow – a company’s purchasing power – are what our clients stand to gain by utilizing our procurement services. When you buy direct, you buy as a single, occasional customer. When you buy through a technology reseller, that purchase is connected to the relationship established between the manufacturer and the reseller. In other words: you get better deals. Inevitably, pricing flexibility is bound to current market prices, but we have the ability to do the best we possibly can for our clients, and this is tied directly to our purchasing power. It’s cheaper and easier to buy a big jar of pickles from Walmart than it is to track down that farmer and buy direct. The bigger the deal, the better the savings… but that’s true of most things in the business world. I’m actually curious to see if the savings we can offer on larger deals can compete with government or educational IT purchasing contracts, but I digress.
Another benefit – or added value – associated with buying through a reseller is the expertise that drives our purchasing process. Every purchase is informed by the opinions of technology professionals who have expert-level knowledge of their respective fields and practices. Purchases are carried out pursuant to a strategic plan, a marriage between two concepts: the mission of our client and the tools best suited to carry out their work. Our Purchasing Team works with our various consulting groups in order to figure out the “what” and the “why” behind each purchase.
The expertise our consultants bring to the table doesn’t stop at the “what” and the “why” behind our purchasing process, but includes the “when” as well. Our consultants know of new technologies and products well before the public does. Many companies, most of them vastly larger than Kraft Kennedy, have access to this knowledge as well, but everything is obviously under a non-disclosure agreement (NDA). This knowledge helps the client avoid buying the wrong thing at the wrong time, because we know when that time will be. In other words, you will not be led astray in procuring the information technology you need to get the job done.
Once the what, why, and when are figured out, our purchasing team (two colleagues and I) then goes about carrying out the “how” behind our purchasing process: we push some buttons, click on some things, then your new equipment will show up wherever you are, either by mail or with one of our consultants.
When clients enlist our procurement services, they simultaneously give themselves access to significant savings via the reseller’s purchasing power while also gaining the expertise and insight that informs our purchasing activity. Meanwhile, they can rest easy knowing everything is being tracked and monitored. To me, this seems like a great benefit that every one of our clients should utilize. These things account for what I consider the added value of procurement services.
At this point, I know there is much more to be said about the added value behind the procurement services of a technology reseller, and I will be sure to address some of these things in future blog posts. The overall message of this post is a suggestion: your organization could stand to benefit by utilizing the procurement services of a technology reseller and gaining access to the added value I’ve described here. This is my opinion, and I know not everyone will agree. Thus, I will conclude by challenging the skeptic to put their disbelief to the test: start small. Approach a reseller for a quote on, say, a heavy duty workstation or laptop. Compare what you would pay for the same exact thing (if you were to buy direct) with the quote you get from whichever reseller you feel is the best fit for your company. My bet would be the reseller’s quote would be the better price.